I have ran into a few things that cause timing to dance around. For one was the bronze oil pump/dist. drive bushing in the block replaced when it was rebuilt? If not it can let the dist. drive flop around and cause the timing to dance. I learned that one the hard way because the first small block I rebuilt yrs. ago I didn't change it on and had that problem. I pulled it back apart and changed it and problem gone. I also ran into a sloppy distributor once (worn bushings) that the timing danced around on. Replaced the bushings and problem fixed. I also ran into one that had a problem in the ECU but it never was a problem until above 4000 so that's probably not your problem although you just never know. As far as the hesitation it could be a lean condition in the carb. How do the plugs look? Is the hesitation worse when the engine is cold? If so it's probably lean and a re-jetting might fix it. Eddy carbs are just fine when jetted properly. Out of the box most carbs need a little touch up because there are so many variables in engine builds.
Also note that in the last week or so the use of vacuum advance has been brought up and a discussion about it. Here are my feelings. If it's a street car keep the vacuum advance and tune it like Moper said except I think he made a typo as it's a 11/64 allen wrench used to adjust the vacuum advance canister. If it's a race car you don't need vacuum advance. On a street car it will help fuel mileage and help keep carbon build up down and improve MPG. I recently swapped from a full mechanical dist. to a blueprinted stock type dist. utilizing vacuum advance and my car responded nicely. When it's cold it runs better cause on fast idle it's pulling the vacuum advance giving it more timing when it needs it cold. The cruising mpg went up about 2 mpg. Not a tremendous gain but one that will surely add up. I also noticed the plugs are running a little cleaner. Oh yeah another thing is if you do play with the distributor watch about installing both light weight springs that come in the spring kit as they will make it be at full advance by 1000-1200 rpm which may be too fast for your car and cause spark knock which will destroy the engine fast. Using both light springs can also cause problems getting the carb idle to be stable cause the timing flutters. Just use one light spring and the stock spring that isn't elongated. That'll give you total advance by about 2000-2400 rpm which is about right for a hot street setup.